World

Portland Could Soon Be the Most Airbnb-Friendly City in the U.S.

UPDATE: July 30 1:51 p.m. — The Portland City Council approved the ordinance Wednesday to legalize one- and two-bedroom short-term rentals in privately owned homes.

"We're allowing commerce to happen in single-family houses ... at a modest scale, at a modest cost, for ordinary homeowners," said Mayor Charlie Hales. The mayor said he was proud of the city's efforts to adapt to the growing sharing economy.

Portland, Oregon could soon be one of the most permissive cities in the U.S. for Airbnb-style rentals, as the city council prepares to vote on regulations that would legalize short-term one- and two-bedroom rentals in privately owned homes.

The council discussed planned rules Wednesday that could have effects outside the northwestern city, as municipal law adapts to the emergence of startups in the growing sharing economy. If adopted, homeowners who have been violating local laws by renting to tourists would have a new ally in a city government trying to keep up with the times. The vote is planned for July 30.

Cities and municipalities across the United States — and around the world — have been approaching the growth of private-sector short-term rentals, through sites like Airbnb, FlipKey, HomeAway and Villas.com, with different tactics and with varying agility, as the rate of growth is outpacing most regulation.

“The Internet is changing everything in ways that we weren’t necessarily ready for or aren’t even necessarily happy about,” Portland Mayor Charlie Hales told The Oregonian. “We ought to figure out how to run apace with this rapid change when we can.”

Hundreds of residents of the northwestern city have already been renting out spare rooms or entire homes, even though many regulations ban it, and operators have actively petitioned the city government asking that the practice be legalized.

At the meeting Wednesday, citizen commenters and city commissioners said many of the economic effects of legalizing short-term rentals are unknown because there haven't been any comprehensive economic studies that look at how the proliferation of short-term rentals affects a community — not just in Portland but nationwide.

Although Airbnb is only one of the services that has made short-term private rentals more available, it has been at the forefront of changes to lodging regulations, likely in part because of how important legalization is for the company's $10 billion valuation. Airbnb announced plans earlier this year to start a customer service outpost in Portland, hiring 160 people, per The Oregonian.

Mashable will update this map periodically.

"This is an exciting step forward for everyone who cares about home sharing," Airbnb spokesman Nick Papas told Mashable about the upcoming adoption. "We look forward to the legislative process moving forward on Wednesday and we are excited to see local leaders embracing the sharing economy and the benefits it brings to the city."

The changes will allow one- or two-bedroom rentals within privately owned homes after the owner gets an inspection of the property, notifies neighbors, and purchases a permit for $180.

A lobbyist for Airbnb had argued against inspections, and supported legalizing apartment and condo rentals as well, in written testimony to the city.

What the city is not doing is just as important as what it is for the future of short-term rental companies. Portland is not legalizing short-term rentals of apartments or condos, and individuals renting an apartment are not legalized to sublet. Even though it is a limited allowance, it will make Portland one of the most permissive of short-term rentals so far.

A yes-vote will put Portland "among the nation’s first cities to deliberately adopt Airbnb-friendly regulations," according to The Oregonian.

The city has recognized that the banned rentals are happening irregardless of regulation.

"This is happening in multi-family buildings, regardless of whether or not we look at it," Saltzman said at an earlier city council meeting. Commissioners have suggested revisiting short-term rentals next year when they address zoning changes.

Airbnb, as part of recent changes to its transactions with hosts and guests, started collecting tax on Portland rentals on July 1. The 11.5% tax includes a 6% city lodging tax and a 5.5% Multnomah County tax.

Although tax collection has been simplified, Portland is unlikely to have an easy time enforcing permitting. According to the agreement with the city, the company will not provide user data to the city and will instead pay taxes as though it were a 1,600-room hotel.

Elsewhere around the world, governments are often taking less friendly approaches toward short-term rentals.

What's Hot

More in World

What's New

What's Rising

What's Hot

Mashable
is a leading global media company that informs, inspires and entertains the digital generation. Mashable is redefining storytelling by documenting and shaping the digital revolution in a new voice, new formats and cutting-edge technologies to a uniquely dedicated audience of 42 million monthly unique visitors and 24 million social followers.